Oireachtas Joint and Select Committees

Thursday, 14 December 2023

Joint Oireachtas Committee on the Implementation of the Good Friday Agreement

All-Ireland Economy: Discussion (Resumed)

Mr. Colin Neill:

I thank the Chair. I will answer a few of the questions posed along the way. The Deputy mentioned VAT at 13.5% - we feel your pain because we are at 20%. That causes huge issues on the island of Ireland because as Dublin and Cork compete, so does Belfast with Cork and Dublin and such. We have a 6.5% higher VAT rate and higher costs on rates. It puts us at a competitive disadvantage. On the economically inactive, I should know this; I apologise. Mr. Kelly probably has it off the top of his head. I think it is circa 25%. It dropped slightly but by a percentage of a point. It is stubborn. We sit higher than the rest of the UK. It is an area about which I am quite passionate. We are putting lots of money in and we are letting people down. Hospitality and tourism have a role because you can come in with no qualifications, be a supervisor within 18 months to two years and can progress through the system. People start as kitchen porters and end up owning their own restaurants and having successful careers. We must find out what the barriers are to that. There are pilot projects our industry codesigned with colleges that have been rolled out. They are short, sharp courses. We are seeing a 50% plus into-work rate out of them because they are codesigned and run in premises in the towns and villages in which we need to get to people. That is one reason I am speaking to the Tánaiste's office and our counterparts down South to see if we can work together in that space. There is a lot of work to be done.

The current national minimum wage in Northern Ireland, when you round it out for a 40-hour week, is about £22,000. That is planned to go up by 10% in April next year. In hospitality, we often we get a bad reputation and people say we are all low-paid. We are not when you see that 45% are managerial-skilled. There are people on the minimum wage but I saw some government job adverts today offering the same wage for different roles. There is a huge chance in our industry to start at that wage, quickly move up through the ranks and improve on that. We would like to pay more. The problem is that we have one of the lowest disposable incomes in the UK.

Our price points are capped. It is only possible to charge what the market can pay and that then affects the costs right down through it. It is about wanting to pay more but needing to have the headroom to pay it. We need to look at VAT, national insurance contributions and stuff. We want people to get more money but that has to be worked out with government. We also talked to the low pay commission in the UK about having it for those who come in at 18, with incremental pay increases to try to put pressure on businesses which do not train and develop to train and develop them. If that pay is to go up, that person needs to be skilled enough to earn the money meaning the business should invest in them. We need to turn it into that sort of model so that we are not just paying a wage but are actually supporting and investing in people. Northern Ireland is part of a UK-wide initiative - a well-being and development promise to treat our staff properly, develop them properly and provide a career path for those who want that.

Chris Hazzard asked about connectivity. We talk about infrastructure and transport strategies. We need a connectivity strategy in the North. We can build roads and such but without working out a public transport strategy to connect with each other - the same applies with taxis, etc. - we are missing a key point.